Dow Jones falls after lowered Q3 outlook

BrendanJanuary

NEW YORK (CBS.MW) -- Shares of Dow Jones fell to a three-week low Wednesday after the New York media company reduced its third-quarter outlook amid weak advertising trends.

The newspaper publisher made the announcement after it revealed its September advertising reservations are below expectations, due mainly to weak technology, travel and business-to-business bookings. The declines offset favorable trends in the first two months of the quarter.

The company now expects advertising linage for the Wall Street Journal to decline in the mid-to-upper single digit percentage range compared to third quarter 2003.

As a result, Dow Jones now expects third-quarter earnings before items to be in line with its year-ago profit of 14 cents per share. That is well below the current average estimate of analysts polled by Thomson First Call for earnings of 22 cents per share.

The stock
DJ
closed down $1.44, or 3.4 percent, at $40.36. The price was the lowest since Aug. 16.

Smith Barney told clients not to be too concerned about the results.

"We view September as more of a blip than a new trend and believe Wall Street Journal linage growth will resume in October," said the firm in a note.

The return to growth indicates that the stock is still a sound investment.

"Though the path to recovery has been uneven," the firm said, "we still see attractive upside potential on a return to normalized numbers from a very depressed base."

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